When the first read on second-quarter U.S. GDP data gets released Friday, its expected to be good enough to grab some big headlines.
But no one is expecting the growth to be anywhere near as good as things got in the years under President Bill Clinton or those of President George W Bush.
David Ranson, director of research at financial research firm HCWE & Co. says the following:
It’s not very often that a press sensation can be anticipated, but Friday morning’s GDP announcement might be one of those opportunities. A real growth rate in excess of 4 percent is likely to get a lot of attention, and that’s what’s implied by the latest data
On average, economists are expecting the growth rate to hit 4.1% in the quarter, according to data from Briefings.com. Some even see growth rates closer to 5%. “[…] our Q2 GDP tracking estimate is unchanged at 4.6%,” states a recent report from Japanese bank Nomura.
Better still, HCWE’s Ranson says the growth is accelerating.
Such a phenomenon is something of which the country should be proud. It is helping push unemployment rates lows not seen in years and boosting the earnings of corporations. That will no doubt have the effect of helping keep the stock market high.
If the actual growth comes anywhere close to forecast figures, then president Trump will no doubt make great hay from the news. That’s to be expected from this president.
However, the growth rate for the three months ending June hardly looks likely to come anywhere near the level that was reached in the later years of the Clinton administration.
In the second quarter of the year-2000 growth peaked at 7.5%, according to data from the St. Louis Federal Reserve. At the time that was the fastest growth level since the late 1980s when George H. W. Bush was president. It is also a rate of growth that has never subsequently been topped.
That’s right the economic growth hasn’t been higher than it was under Bill Clinton.
It did come close during the George W Bush administration when growth for that business cycle peaked at 7.1% in the second quarter of 2004.
Even when adjusted for inflation, which was higher before the financial crisis of 2008-2009, the growth of the Clinton and the Bush eras still stand out as super strong. You can see the data from the St. Louis fed here.
Still, the Trump administration has some time in office, and as HCWE’s Ranson says, the economy is accelerating, meaning that the growth rate is getting faster. In other words, if the speed keeps increasing then growth may yet exceed that reached when Bill Clinton was in the Oval Office.